The major indexes ended the day mixed, influenced in part by weak earnings out of the tech sector. The S&P 500 eked out a fractional gain, while the Dow fell less than a tenth of a percent. The tech-heavy Nasdaq was off nearly 1%. This coming after Fed chairman Ben Bernanke reaffirmed plans to keep the central bank's bond buying program in place earlier in the week, which sent the Dow and S&P to hit fresh record highs on Thursday.
Today's main plot line was a tale of two tech companies. Microsoft (MSFT) and Google (GOOG) both saw their shares decline on disappointing earnings reports which were released after Thursday's closing bell.
In the case of Microsoft, shares tumbled more than 11%. That made for the stock's worst day since 2009. Microsoft made 66-cents a share when estimates were for 75-cents. Revenue was $19.9 billion, short of the consensus for $20.73 billion. One of the biggest problems was disappointing sales of the Surface tablet. It took a $900 million charge for unsold inventory of the devices. The company is also hurting from the weak PC market.
As for Google, the search giant pared some losses and closed down 1.5% after the company reported earnings of $9.56 a share versus estimates of $10.78. Revenue was $300 million short of expectations at $14.1 billion. Google's main problem appeared to be the 6% drop in the cost-per-click for advertisements. That decline followed a 4% fall last quarter.
Whirlpool (WHR) climbed 8% after releasing its quarterly earnings. Profits were up 75% from a year ago and Whirlpool raised its full-year outlook, citing a rebound in sales worldwide. Therefore it didn't seem to matter that the appliance maker missed earnings estimates by a nickel, reporting profits of $2.37 a share. The company did manage to beat on revenue with $4.7 billion versus $4.67 billion. Shares of Whirlpool have underperformed the market in 2013 up 11%. But they're up about 75% since this time last year.
Schlumberger (SLB) climbed 5.5% after blowing away estimates with its earnings. The company made $1.57 a share when consensus was for $1.10. Excluding items that number came down from $1.57 to $1.15, still ahead of estimates. The company says it hit a three-decade high for drilling activity outside North America. Specifically exploration and drilling activity rebounded in places like China and Australia. At the same time growth continued in the markets like Saudi Arabia and Iraq.
GE (GE) also climbed more than 4.5% to its highest price since October, 2008 on earnings. The company beat by a penny on the bottom line, posting 36-cents a share. It did however miss on revenue which came in at $35.1 billion when estimates were for $35.55 billion. GE attributes the shortage in sales to a faster than expected shrinkage of its GE Capital unit.
Chipotle (CMG) rose more than 8% and crossed the $400 threshold for the first time in nearly a year on its earnings. Chipotle matched on earnings with $2.82 a share. But revenue was stronger than expected at $816.8 million. Perhaps of more importance was the improvement over last year when sales had yet to hit $700 million. The chain credits the increase to the addition of new locations.
Intuitive Surgical (ISRG) closed down almost 7% today. We highlighted this company earlier in the month when it warned of weak sales for its Da Vinci surgical robots. Now Intuitive also says it has gotten a warning letter from the FDA relating to inspection problems with the equipment. The news came as the company released earnings after yesterday's closing bell. It posted $3.90 a share when consensus was for $4.04. Revenue was also well under $600 million when it was supposed to be substantially above that. Even prior to this morning's losses shares were down 17% in the past month.